Louise Lee, Head of Logistics at TranTran, is analyzing the inventory costs of product Q2000. The...

 

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Louise Lee, Head of Logistics at TranTran, is analyzing the inventory costs of product Q2000. The demand for this product is normally distributed with a mean of 284 pallets per year and a standard deviation of 48 pallets per year. The lead time for this product is 2 weeks. The cost of each pallet is $4,000, including transportation costs, and TranTran takes ownership of the product as soon as it leaves the supplier's facility. The ordering cost is $1,000 per order, independent of the number of pallets that Tran Tran orders. TranTran's annual holding rate for product Q2000 is 15%. Assume 52 weeks per year. Considering that TranTran has set a CSL of 95% for product Q2000, answer the following question: What is the annual cost of safety stock (in US dollars) for product Q2000? Enter as dollars without $. Round your answer to the nearest integer. Louise Lee, Head of Logistics at TranTran, is analyzing the inventory costs of product Q2000. The demand for this product is normally distributed with a mean of 284 pallets per year and a standard deviation of 48 pallets per year. The lead time for this product is 2 weeks. The cost of each pallet is $4,000, including transportation costs, and TranTran takes ownership of the product as soon as it leaves the supplier's facility. The ordering cost is $1,000 per order, independent of the number of pallets that Tran Tran orders. TranTran's annual holding rate for product Q2000 is 15%. Assume 52 weeks per year. Considering that TranTran has set a CSL of 95% for product Q2000, answer the following question: What is the annual cost of safety stock (in US dollars) for product Q2000? Enter as dollars without $. Round your answer to the nearest integer.

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To calculate the annual cost of safety stock for product Q2000 we need ... View the full answer